Union line loses $6M

Press, 9 November 1983, Page 46

Union line loses $6M

Union Shipping Group, Ltd, plunged into the red in the year to June 30, losing $5.9 million compared with a profit of $3.6M in the previous corresponding period. The group incurred a pretax loss of $10.7M, but credits ' of S4M from deferred tax, minority losses of $29,000, extraordinary profits of $607,000, and profits of $63,000 from associated companies, reduced the loss.

The managing director, Mr J. N. Keegan said that the losses sustained were caused by a pronounced fall in freight which was not apparent until the end of the first quarter, but which had caused concern by the half year. “It was in this period that our main competition in the Tasman decided to withdraw after sustaining heavy losses. “This downturn in volume, coupled with the entry of the State lines of

Australia and New Zealand into our major trade — the Tasman — caused the need for some major structural changes to both the shore activities and fleet,” he said. Substantial reductions in staff were achieved in management, administration, terminals, and at sea.

The company was still over-manned both in some terminals and on ships and further reductions would be necessary if New Zealand was to retain a viable independent shipping industry. Union supported the efforts of the New Zealand Shipping Corporation to achieve reasonable manning scales in the vessel it proposes to introduce in the near future. . The benefits from the changes in the group were now apparent and if the slight current increase in demand was sustained into the new year, a return to profitability could be expected, he said.